Coronavirus (COVID-19) Benefits and income

This page contains information on measures introduced to deal with the coronavirus (COVID-19) pandemic and options for those whose benefits and income have been affected.

This content applies to Scotland

Universal credit

The Department for Work & Pensions has announced temporary arrangements aimed at supporting benefit claimants impacted by coronavirus. Among other measures, it has been announced that:

  • those affected by Covid-19 will be able to apply for Universal Credit and can receive up to a month’s advance upfront without having to attend a Jobcentre in person, and

  • until 31 July 2021, the minimum income floor will not apply to self-employed UC claimants. UC payments will be calculated based on monthly earnings instead

The minimum income floor was re-introduced after 31 July 2021. Self-employed claimants should be given a month's notice where the minimum income floor is being applied. [1]

From 6 April 2020, the standard allowance of UC was temporarily increased by £20 [2]. The £20 uplift ended on 6 October 2021.

Suspending third party deductions from UC

The DWP suspended some third party deductions (TPD), including repayments of rent arrears, until 10 May 2020. This could put tenants whose UC is subject to an automatic deduction for rent arrears at risk of eviction action if they have agreed to a repayment plan and this is interrupted as a result. Tenants in this situation should:

  • contact the landlord and arrange to repay any money that would normally be subject to a TPD for rent arrears

  • evidence the payment and if the payment is not successful, their attempts to make it

  • update their UC journal to note the fact that a TPD for rent arrears was suspended without a warning.

Local housing allowance

From 1 April 2020, the local housing allowance (LHA) rates were increased,so that they cover at least 30 per cent of market rents in each area. [3] The latest LHA rates are available on the Scottish Government page.

Housing benefit

In general no new claims can be made for housing benefit, most claimants must apply instead for universal credit. See the section Universal Credit.

However the follow claimants must still make an application for Housing Benefit from their local council:

  • they received or recently stopped receiving a benefit which included Severe Disability Element

  • they or their partner have both reached state pension age

  • they or their partner have been in receipt of Pension Credit since 15 May 2019

  • they live in temporary accommodation

  • their landlord is a charity of housing association and they provide care or support (for example sheltered housing)

LA Welfare Direct 4/2020 contains information about the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS), including how the schemes work and who is eligible to apply, and confirms that for the purpose of calculating the claimant's entitlement to housing benefit:

  • income obtained from employer under the CJRS is to be treated as earned income and this continues to be based on the number of hours the employee normally works

  • income obtained under the SEISS is to be treated as taxable income received from self-employment and is part of the self-employed income assessment for the tax year in which it is received.

Housing benefit for prisoners on temporary release

Prisoners on temporary release due to the coronavirus pandemic are eligible for housing benefit, provided they meet the standard HB eligibility criteria. The HB Circular A8/2020 clarifies that the amendment to the HB regulations enabling prisoners in these circumstances to claim HB will last eight months from 13 March 2020. [4]

Discretionary Housing Payment

Existing housing benefit claimants and people in receipt of universal credit who are still struggling to meet their housing costs can apply for Discretionary Housing Payment.

Scottish Welfare Fund

Tenants in financial difficulties may be entitled to assistance from the Scottish Welfare Fund.

The regulations governing the Scottish Welfare Fund allow a local authority to make more than three payments to an individual in a 12 month period if it considers there are ‘exceptional circumstances’.

The Social Security Secretary has written to each local authority noting that the Scottish Government consider the current circumstances to be ‘exceptional’ and confirming the provision of an additional £45 million for the Scottish Welfare Fund. [5]

Scottish Welfare Fund: Crisis Grants

The general restriction of Scottish Welfare Fund crisis grant payments to three per person per year has been waived during the COVID-19 outbreak.

Self-Isolation Support Grant

The Scottish Government will issue a non-repayable grant of £500 to workers on a low income who have been asked to self isolate through Test and Protect. This grant does not use public funds, meaning that clients with the right to live in the UK who have no recourse to public funds can also apply for the grant.

The client will pay income tax on the grant if it takes the client over their tax-free personal allowance. Self-employed clients must report the grant on their Self Assessment tax returns.

The client must meet all four eligibility criteria to receive the grant:

  1. Test and Protect or the Incident Management Team must have told either the client to self-isolate, or a child under 16 they are the parent or carer for, or someone over 16 who they are caring for

  2. they must be employed or self-employed

  3. they must show they will lose income because they can't work from home

  4. they must be on a low income or getting one of these benefits:

  • Universal Credit

  • Working Tax Credit

  • Income-based Employment and Support Allowance

  • Income-based Jobseeker's Allowance

  • Income Support

  • Housing Benefit

  • Pension Credit

  • Council Tax Reduction

Clients will need to apply through their local council within 28 days of starting their isolation period. If they are awarded the grant the payment should be made within 3 days of the confirmation. Clients should be prepared with the following information for their application:

  • a bank statement

  • proof of low income if they are not in receipt of any of the benefits listed above

  • proof of employment or self-employment

More information can be found on the Scottish Government's page on the Self-Isolation Support Grant.

Low Income Pandemic Payment

Local authorities will issue a one-off Low Income Pandemic Payment of £130 to those who were in receipt of council tax reduction in April 2021.

It will also be made if a client does not pay council tax for the following reasons:

  • they are in temporary accommodation, including refuges

  • they aren’t occupying their home because they’re being cared for

  • they aren’t occupying their home because they are caring for someone

  • everyone in the household is either a care leaver, under 18, or severely mentally impaired

A person will not be eligible for the payment if they are in receipt of a council tax reduction just under the Single Person Discount.

Clients should approach their local authority if they believe they are eligible but have not received the payment.

While the award will be automatic, it may be necessary for the client to register how they would like to receive the payment with the council.

Payments will be issued by the end of October 2021. Find contact details for each local authority on the Scottish Government website.

Changes to Jobcentre Plus appointments

From March 2020, most in person appointments for existing claimants have been suspended. Claimants already in receipt of benefits will continue to receive them. At the moment, claimants are advised not to attend the Jobcentre Plus unless directed to do so, or unless exceptional circumstances occur.

Health and disability assessments

The DWP has confirmed that face to face appointments for the purpose of disability-related benefits can resume from May 2021 in Scotland, taking into account local lockdown restrictions. Claimants will receive letters inviting them for these assessments, which will be used alongside paper and telephone assessments. These will be for the purposes of determining health and disability benefits including:

  • Work Capability Assessments (WCAs) for claims for the additional health amount of Universal Credit and Employment and Support Allowance

  • Personal Independence Payment (PIP)

Help for employees

Furloughed staff

The furlough scheme ended on 30 September 2021.

More information on this can be found on the UK Government page COVID-19 Guidance for employees.

Sickness/self isolation

Where an employee cannot work because they have COVID-19 and/or are following the government’s advice to self-isolate, they may be entitled to sick pay through a company scheme, or may be able to apply for Statutory Sick Pay (SSP). As of 13 March 2020, there is no waiting time, meaning that SSP is available from the first day of absence. [6]

Help for self employed

The self employment income support scheme ended on 30 September 2021.

Further information can be found at Gov.uk website Self Employment Income Support Scheme.

Sickness/self isolation

Self-employed are not entitled to statutory sick pay, however, they can claim universal credit (UC) because of COVID-19 illness or self-isolation and if they do, they will not be subject to the minimum income floor. [7] It means that the award for the time they are affected by Covid-19 will not be based on assumed earnings where they exceed the actual income from self-employment.

No recourse to public funds

COSLA has produced a framework to help local authorities to support people with no recourse to public funds (NRPF). The key points of this are:

  • Local Authorities have statutory Public Health duties to provide emergency accommodation to all people with NRPF who are roofless or rough sleeping during the pandemic in order to protect them from the virus and mitigate public health risks. This is in addition to continued duties to provide any support necessary to safeguard vulnerable people, including children in families with NRPF and adults with community care needs under devolved social care legislation.

  • Local Authorities can provide financial support, food or other emergency assistance, so long as the source of funding is not a prohibited public fund (such as the Scottish Welfare Fund) and can work in partnership (e.g. with third sector partners)  to ensure that support can be provided effectively. In circumstances where an individual is receiving assistance solely on public health grounds, this will be provided on a temporary basis, as part of an emergency response to the COVID-19 pandemic.

  • Any support provided and costs incurred should be clearly recorded and reviewed, in line with changes in public health advice and/or any relevant changes in UK immigration rules during this period.

The framework COVID-19 Response Planning: Supporting Migrants with No Recourse to Public Funds can be found on the COSLA website.

Homeowners

In addition to the general information on benefits and income there are further details about hardship options for homeowners on the page see Coronavirus (COVID-19) - Mortgage payment advice.

Tenant hardship grant and loan funds

The Scottish Government has introduced a tenant hardship grant fund and loan fund. These are for tenants who have had their finances impacted by the COVID-19 pandemic and do not have other means of support.

The grant fund

Tenants can apply for a grant through their local council’s homeless prevention team. The grant does not need to be paid back. The grant fund will be more suitable for tenants than the loan fund where the tenant is on a low income and would not be able to pay the loan back.

Criteria:

The grant fund is available for:

  • social tenants

  • private tenants

  • tenants of student accommodation.

People with no recourse to public funds will not be able to access the fund. The grant can cover arrears accrued between 23 March 2020 and 9 August 2021. Rent arrears built up after 9 August 2021 will only be covered by the grant fund in exceptional circumstances. The grant can cover all of a tenant’s arrears or a proportion of them. This is down to the discretion of the homeless prevention team. If an award is made for a proportion of the arrears then the council should work with the tenant and the landlord to establish a repayment plan for the rest of the arrears. The grant is paid directly to the landlord, so as not to affect any benefit entitlement of a tenant. Any private landlord receiving a grant fund payment must be registered with their local council.

Protection against eviction:

Any landlord evicting a tenant over rent arrears needs to follow the pre-action requirements both in the social rented sector and in the private rent sector. It is expected that councils will want to see evidence the landlord has followed other pre-action requirements before awarding a grant payment. Landlords will also need to agree not to start or proceed with any repossession action to receive a grant payment. When preparing a defence at a tribunal, advisers should note where:

  • a landlord has failed to signpost to the grant fund or

  • refused to accept a grant fund payment

The loan fund

The loan is administered by the Scottish Government, and can be applied for through the tenant hardship loan fund website.

Criteria:

Loans are available for social and private tenants. People with no recourse to public funds will not be able to access the fund.

Fund details:

  • the loan can pay up to a maximum of 9 months’ rent costs covering rent arrears and future rent

  • it can cover arrears which have arisen since 1 January 2020

  • it can include up to a maximum of 3 months of future rent payments as part of the 9 month total

  • the loan is interest free

Loan repayments will be deferred for 6 months and repaid over 60 months. The loan fund will be subject to an affordability assessment to check whether the applicant has enough surplus income after costs to make the loan repayments. Applicants are advised to seek money advice to ensure that the loan is suitable for them. The application process for the loan highlights that there may be other more appropriate financial support options available to tenants. The loan fund will signpost people to sources of advice and support before accepting an application. More information can be found in Tenant's Hardship Loan - Information for advice providers.

Protection against eviction:

For a tenant to receive the loan private landlords will have to agree not to repossess a property on certain eviction grounds. These grounds are:

  • rent arrears

  • the landlord or their family member intend to live in the let property

  • the landlord intends to sell the let property

  • the landlord intends to use the let property for a purpose other than housing

Any action to end a tenancy on these grounds that has already been started will also need to be withdrawn.

Further advice and resources

General information on pandemic-related changes to claims for benefits and a step-by-step guide to claiming universal credit are available on Gov.uk.

Citizens Advice have published a guide to benefits entitlement for those affected by coronavirus that includes more information about SSP and other hardship options for those unable to work or continue self-employment as a result of COVID-19.

The Department for Work and Pensions has published a collection of guides for members of the public whose income has been affected by the coronavirus pandemic, including information on what benefits are available and how to claim them:

Coronavirus (COVID-19): what to do if you were employed and have lost your job

Coronavirus (COVID-19): what to do if you’re employed and cannot work

Coronavirus (COVID-19): what to do if you’re self-employed and getting less work or no work

Coronavirus (COVID-19): what to do if you’re already getting benefits.

Last updated: 27 September 2021

Footnotes

  • [1]

    s.1 The Universal Credit (Coronavirus) (Restoration of the Minimum Income Floor) Regulations 2021

  • [2]

    reg 3 Social Security (Coronavirus) (Further Measures) Regulations 2020/371

  • [3]

    reg 4 Social Security (Coronavirus) (Further Measures) Regulations 2020/371.

  • [4]

    para 14 of reg 7 The Housing Benefit Regulations 2006 SI 2006/213 and para 14 of reg 7 The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 SI 2006/214, as amended by Social Security (Coronavirus)(Prisoners) Regulations 2020 SI 2020/409; HB Circular A8/2020.

  • [5]

    Scottish parliamentary question: Shirley-Anne Somerville’s written answer 27th March 2020 can be found on the Scottish Parliament wesbite

  • [6]

    reg 2 Employment and Support Allowance and Universal Credit (Coronavirus Disease) Regulations 2020/289

  • [7]

    reg 2 Social Security (Coronavirus) (Further Measures) Regulations 2020/371; reg 4 Employment and Support Allowance and Universal Credit (Coronavirus Disease) Regulations 2020/289